UAE signals possible shift from dollar to yuan in oil trade amid rising regional tensions |
The United Arab Emirates has privately warned the United States that it may consider moving away from the US dollar in oil transactions, raising the possibility of a significant shift in global energy markets and financial systems. According to a report by The Wall Street Journal published on April 19, senior Emirati officials conveyed that Abu Dhabi could be “forced” to adopt the Chinese yuan for parts of its oil trade if financial pressures linked to escalating geopolitical tensions continue to mount.
The message was reportedly delivered by Khaled Mohamed Balama, governor of the UAE Central Bank, during a meeting in Washington with US Treasury Secretary Scott Bessent. While the remarks stopped short of a formal policy announcement, US officials interpreted them as a pointed signal of dissatisfaction with Washington’s current approach to regional security and financial coordination.
At the core of the UAE’s concern is the risk of a potential dollar liquidity crunch stemming from the broader fallout of a US-led military confrontation with Iran. Emirati officials are said to be seeking assurances that the US would provide a financial backstop-such as a currency swap arrangement-to stabilize access to dollars in times of crisis. Without such guarantees, Abu Dhabi appears increasingly open to diversifying its financial channels, including greater use of the Chinese currency.
Currency swap lines, typically coordinated by the Federal Reserve, allow central........